Only for Guild Members » respect to the indirect impacts of changin

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The Problem With Mergers & Acquisitions


By Warren Friton

In today's ever changing business environment Mergers and Acquisitions are playing an ever increasing role in shaping the landscape of corporate America. The interesting point here is that upwards of 70% of these mergers fail to deliver on share holder expectations. The reasonable and prudent question then becomes why these mergers fail to deliver on the promised or projected results. The answer often times is quite simple; it is a direct result of the integration process not being carefully thought through with respect to the indirect impacts of changing a business unit. The mentality here is often that when company A buys company B that they rush in to change all policies and procedures to more closely meet their business model. At face value that would appear to be the intelligent course of action however little consideration is given to what they are about to change and the ramifications that follow. I have been following two of these companies as a case study for the last few months. Both of these companies shall remain nameless because the purpose of this article is not to embarrass anyone but merely to point out the reason that these mergers have questionable outcomes is due to the method of integration of the business units.

The first company is a shipping company who operate container ships amongst other endeavors. This company purchased one of its competitors which at the time of acquisition was a profitable business unit. During the integration process company A which purchased company B rushed into the process in an effort to complete the integration on the shortest possible time line. Evidently little or no thought was given to what the overall after affects of this would be. The irony here is that in the process company A first began the consolidation by switching its operating software to the one used by the parent. If all things were equal this would represent a prudent course of action however in this case the changes made were for them to turn their backs on a state of the art software package to implement their own which is an old DOS system. The end result here is more time on the part of the operators to perform their duties and results in an increase in manpower demands that will surely affect their productivity. This combined with the sub standard moral that has resulted from the approach taken during the integration will surely take its toll on the bottom line thus delivering lower than forecasted results for the share holders. The share holder meeting should be interesting to say the least.

The second company is an airline. These two business units who were both under performing, (in fact one of them was in bankruptcy court) Cheap Danilo Gallinari Jersey , were merged in an effort to construct a business unit that was viable. Again the integration was I believe not thought through due to the current climate within the two companies'. It is important to note that in this instance both companies were having financial difficulties and were grasping at straws I would imagine given the circumstances. The challenge for this business unit will be in forging a business alliance with the unions that will allow for the transition. If we were to take a historical view of this then it's safe to say that there will be major hurdles to overcome and success or failure will be the direct result of how these issues are handled. At the time of this article there is a significant amount of turmoil within these business units and the fight has begun. If not properly managed then the end resu. Cheap Jerseys Wholesale Jerseys Cheap Jerseys From China Cheap Jerseys Free Shipping Cheap Nike NFL Jerseys Wholesale NFL Jerseys Cheap NFL Jerseys China Cheap NFL Jerseys China Wholesale NFL Jerseys Free Shipping Cheap NFL Jerseys